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2019 (11) TMI 977 - AT - Income TaxBogus purchases - AO being not satisfied with the assessee’s reply on purchases he has disallowed 20% of assessee’s purchases holding as unverifiable purchases - HELD THAT:- It is seen that in the nature of purchases made by the assessee during the year under consideration and that of the assessment year 2012-13 and thereafter there is no change in the nature of purchases since they have been made in cash, supported by self made vouchers. The very nature of the industries, a slaughter house, the assessee company is required to made purchases from the small butchers in cash to whom it had to make advance payments where complete address would not be available. CIT(A) has observed that since the AO has accepted the part of the purchased made in cash supported by self made vouchers, there is no reason in making disallowance of 20% of the purchases, without pin pointing specific cash vouchers. CIT(A) has rightly observed that the AO has made disallowances in the realm of assumption and guess work. We are inclined to agree with the finding of the CIT(A) that assessee case get strength from the AO’s own action that in subsequent years no such disallowances have been made by the AO, particularly when there was no change of facts in the case of the assessee. The disallowance made by the AO, without any basis cannot be approved. CIT(A) is justified in deleting disallowance - Decided against revenue.
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